Understanding Tennessee’s Long-Term Care Income Limit and What Happens If You Exceed It
Key Takeaways: The $2,982 monthly figure is Tennessee’s 2026 income limit for a single applicant seeking long-term care Medicaid, paired with a $2,000 countable asset limit. It comes from the TennCare Eligibility Reference Guide and applies statewide, including Franklin and Williamson County. The cap governs Institutional Medicaid, HCBS waivers through TennCare CHOICES, and the Katie Beckett program, not the lower $994 ABD limit. Applicants must also meet medical level-of-care standards and non-financial requirements such as residency and citizenship. Married couples follow different rules, including a combined $5,964 limit when both spouses apply and a Community Spouse Resource Allowance of up to $162,660. Income above the cap is often solvable through a properly drafted qualified income trust.
The $2,982 monthly figure is the 2026 TennCare income limit for a single applicant seeking Nursing Home Medicaid in Tennessee, paired with a $2,000 countable asset limit. It applies to Institutional Medicaid covering nursing facility care, ICF/IID services, or Home and Community-Based Services. If an applicant’s countable income exceeds that ceiling by even a few dollars, TennCare will generally deny the application. The good news is that exceeding the cap is often solvable through a legal tool called a qualified income trust.
If you are helping a parent or spouse in Williamson County navigate this process, Sawyer & Associates offers a free 30-minute consultation. Call 615-570-9901 or reach out to our team today to discuss your options.
Where the $2,982 TennCare Income Cap Comes From
The figure comes from the official TennCare Eligibility Reference Guide, maintained by the Bureau of TennCare and updated in February 2026. The guide lists the Institutional Medicaid income limit at $2,982 per month with a $2,000 resource limit. Because this is a statewide standard, the same number applies in Franklin, Brentwood, and every community in Williamson County.
The cap is adjusted periodically, which is why the 2026 number differs from prior years. The figure ties to the federal special income level of 300% of the SSI federal benefit rate. Tennessee’s funding structure is addressed in Tenn. Code Ann. § 71-5-1417, "Funding for medicaid long-term care services."
The income cap is only one part of the eligibility test. Under Tenn. Code Ann. § 71-5-1407(a), "the bureau of TennCare shall define the state’s medical eligibility criteria for all long-term care services, including nursing facility and home- and community-based waiver services and adopt such standards by rule." An applicant must meet financial, medical level-of-care, and other non-financial requirements.
The Same Number Reaches Beyond Nursing Homes
The $2,982 cap applies to several long-term care pathways, not just nursing facilities. The 2026 income limit for HCBS waivers is also $2,982 per month with the same $2,000 asset limit. Whether your loved one enters a facility or receives care at home through TennCare CHOICES, the same financial ceiling applies.
This structure traces to Tenn. Code Ann. § 71-5-1404(a), which directs the commissioner to "develop and implement a statewide fully integrated risk-based long-term care system" shifting funding toward "cost-effective home and community-based alternatives to institutional care." The result, TennCare CHOICES, combines primary, acute, and long-term care. Review the statutory language for this integrated long-term care system directly.
Katie Beckett and Employment and Community First CHOICES
The $2,982 figure also governs the Katie Beckett program, serving children under 18 with disabilities or complex medical needs who live at home. The reference guide lists the same $2,982 monthly income limit and $2,000 resource limit, applied to the child’s own income and resources. Katie Beckett has its own medical and program requirements, and Part B is capped in enrollment, so meeting the income figure alone does not guarantee services.
Employment and Community First CHOICES uses tiered limits. The 217-Like Group uses the $2,982 monthly cap, while the Working Disabled Group uses 250% of federal poverty level and the At-Risk Group uses 150% FPL. An applicant over the limit for one group may still qualify under another.
Why the Cap Is Not the Same as ABD Medicaid
A frequent misunderstanding is confusing the long-term care cap with Aged, Blind, and Disabled Medicaid. The 2026 ABD income limit is $994 per month for a single applicant, or $1,491 combined for a married couple. Someone whose income is too high under ABD rules may still qualify for institutional or waiver coverage under the higher $2,982 standard, provided medical and other requirements are met.
| 2026 TennCare Category | Monthly Income Limit (Single) | Resource Limit |
|---|---|---|
| Institutional Medicaid | $2,982 | $2,000 |
| HCBS Waivers (CHOICES) | $2,982 | $2,000 |
| Katie Beckett | $2,982 | $2,000 |
| ABD / SSI-Related | $994 | Varies |
| 100% FPL benchmark | $1,330 | N/A |
The guide’s federal poverty level chart lists 100% FPL at $1,330 for one person and $1,804 for two. Medicare Savings Program resource limits are $9,950 for an individual and $14,910 for a couple. Additional detail appears in the TennCare eligibility reference guide.
How a Qualified Income Trust in Tennessee Solves the Problem
A qualified income trust, also called a Miller trust, is a legal arrangement authorized under 42 U.S.C. § 1396p(d)(4)(B) that allows income above the cap to be diverted into a dedicated trust account so the applicant may meet the income test. Tennessee’s income cap operates as a hard ceiling, so a person receiving $3,100 per month in Social Security and pension would be over the limit despite that amount falling far short of nursing home costs. The trust bridges that gap lawfully, and federal law generally requires the state receive any remaining funds at death, up to Medicaid benefits paid.
Setting up a qualified income trust in Tennessee involves more than downloading a form. The trust must be drafted to satisfy federal and state requirements, funded correctly each month, and administered with careful records. Common problems include:
- Depositing the wrong amount or in the wrong month
- Failing to open a separate, dedicated bank account
- Naming a trustee who cannot manage monthly transfers
- Assuming the trust solves the $2,000 asset problem, which it does not
Timing Matters More Than Most Families Expect
The trust must be established and funded in each month for which coverage is sought, as these instruments typically do not work retroactively. Families in crisis, such as an unexpected hospital discharge, often have very little time. Working with an elder law attorney in Franklin TN early may prevent months of uncovered care costs.
Eligibility Is an Ongoing Obligation
Approval is not the finish line. Under Tenn. Code Ann. § 71-5-1407(b)-(c), nursing facility residents and waiver enrollees who meet continued stay criteria "and who remain financially eligible for medicaid shall continue to be eligible." Continuing to satisfy financial rules, often through monthly funding of a QIT in Tennessee, is a continuing requirement, and TennCare periodically redetermines eligibility.
What Married Couples in Williamson County Should Know
Married couples face different numbers. When both spouses apply, the combined 2026 income limit is $5,964 per month with $4,000 in countable assets. When only one spouse applies, the applicant’s limit remains $2,982 per month, the non-applicant spouse’s income is generally not counted toward the applicant’s limit, and the non-applicant may retain up to $162,660 in countable resources under the Community Spouse Resource Allowance. A community spouse with limited income may also receive a monthly maintenance needs allowance from the applicant’s income.
These spousal protections prevent the healthy spouse from being left impoverished. Applying them correctly requires careful review of how income is titled and assets characterized. Outcomes depend heavily on specific household facts.
💡 Pro Tip: Gather twelve months of bank statements, award letters, and deed records before your first meeting. Tennessee applies a five-year look-back period to asset transfers, and complete documentation shortens the process considerably.
Where Estate Planning Fits Into the Picture
Long-term care planning and estate planning are closely related. Many families believe having a will avoids probate, generally, it does not. A will directs how property passes, but property passing under a will generally must go through probate court in Tennessee. A properly drafted and funded revocable living trust may allow assets to pass outside probate, though a revocable trust generally does not shelter assets for Medicaid eligibility purposes.
Coordinating both plans can protect the family home and lifetime savings more effectively. Our elder law and estate planning articles cover related questions. Tenn. Code Ann. § 71-5-1404(c) states that "nothing in this part may be construed to create an entitlement to home and community-based services," and services depend on "the availability of funding in each year’s appropriation bill."
Frequently Asked Questions
1. What happens if my income is only slightly over the TennCare income cap?
Being even slightly over the limit generally results in denial. In many cases, a properly drafted qualified income trust may resolve the issue.
2. Does the qualified income trust let me keep the extra money?
Generally, no. Funds are directed toward cost of care, personal needs allowance, health insurance premiums, and sometimes spousal or family allowances. The trust is a compliance mechanism, and federal law generally requires remaining funds to reimburse the state at death.
3. Is the $2,982 limit different for home care versus a nursing home?
The 2026 single-applicant income limit is $2,982 per month for both Institutional Medicaid and HCBS waivers through TennCare CHOICES. The medical level-of-care standard, services, and cost-sharing may differ between settings.
4. Do I still need to meet a medical requirement?
Yes. Under Tenn. Code Ann. § 71-5-1407(a), the Bureau of TennCare defines medical eligibility criteria by rule. Financial eligibility alone does not qualify an applicant.
5. Does Sawyer & Associates offer anything for veterans?
Yes, our firm offers a veteran discount and regularly assists families exploring VA Aid and Attendance benefits alongside Medicaid planning.
Bringing the Numbers and the Planning Together
The $2,982 monthly income cap is the 2026 threshold for Tennessee’s long-term care Medicaid pathways, including nursing facility care, CHOICES waiver services, and the Katie Beckett program, each paired with a $2,000 resource limit. It should not be confused with the $994 ABD limit, and it is only one part of an eligibility test that also requires meeting level-of-care standards and non-financial requirements. Exceeding the cap does not end the conversation, since a qualified income trust in Tennessee may allow an otherwise ineligible applicant to move forward. Because every family’s income, assets, and timeline differ, guidance tailored to your circumstances matters.
If your family is weighing nursing home placement or in-home care in Franklin, Sawyer & Associates is ready to help you build a plan in clear, plain language. Call 615-570-9901 or schedule your free consultation to get started.
Disclaimer: This content is for informational purposes only and is not legal advice. Every case is unique, and results may vary. Consult an attorney about your specific circumstances.
